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Costco Wholesale Corp. /New (COST) Fundamental Analysis & AI Grade 2026

COST Nasdaq Retail-Variety Stores WA CIK: 0000909832
Recently Updated • Analysis: Jun 4, 2026 • SEC Data: 2026-05-10
Combined AI Grade
A
80% Confidence
AGREEMENT
B
76% Conf
A
84% Conf

📊 COST Key Takeaways

Revenue: $207.4B
Net Margin: 3.0%
Free Cash Flow: $6.9B
Current Ratio: 1.07x
Debt/Equity: 0.17x
EPS: $14.01
AI Grade: B with 76% confidence
Costco Wholesale Corp. /New (COST) receives a A fundamental grade with 80% confidence from our AI analysis based on SEC 10-K filings. With revenue of $207.4B, net profit margin of 3.0%, and return on equity (ROE) of 18.6%, Costco Wholesale Corp. /New demonstrates strong fundamentals in the Consumer sector. Below is our complete COST stock analysis for 2026.

Is Costco Wholesale Corp. /New (COST) a Good Investment?

Claude

Costco exhibits fortress-grade financial health with robust free cash flow ($6.9B), exceptional capital efficiency (18.6% ROE, 7.2% ROA), and a pristine balance sheet (0.17x D/E, 78.8x interest coverage). However, revenue and net income growth have completely stagnated at 0% YoY despite the company's dominant market position, suggesting either cyclical headwinds or structural competition pressures that warrant caution despite operational excellence.

ChatGPT

Costco shows high-quality fundamentals built on consistent profitability, strong free cash flow generation, and a very conservative balance sheet with low leverage and ample cash. While the latest period shows flat revenue and net income, the business still converts sales efficiently for a low-margin retailer and maintains exceptional financial resilience, supporting a favorable long-term fundamental view.

Costco Wholesale Corp. /New Key Strengths (COST)

Claude
  • + Fortress balance sheet with minimal leverage (0.17x D/E) and exceptional interest coverage (78.8x), providing substantial financial resilience and strategic flexibility
  • + Strong capital efficiency demonstrated by 18.6% ROE and 7.2% ROA despite ultra-thin margins inherent to warehouse retail model
  • + Robust free cash flow generation of $6.9B annually combined with $18.9B cash position enables shareholder returns and strategic investments without financial stress
ChatGPT
  • + Strong balance sheet with $17.38B in cash, low debt/equity of 0.18x, and very high 74.5x interest coverage
  • + Reliable cash generation with $7.68B operating cash flow and $4.87B free cash flow
  • + Solid profitability for a scale retailer, including 12.0% gross margin, 3.7% operating margin, and 12.6% ROE

COST Stock Risks: Costco Wholesale Corp. /New Investment Risks

Claude
  • ! Revenue growth completely stalled at 0% YoY, indicating potential market saturation, competitive intensity, or macroeconomic headwinds affecting member traffic or spending
  • ! Extremely thin profit margins (7.9% gross, 3.8% operating, 3.0% net) provide minimal buffer for unexpected cost inflation, wage pressures, or supply chain disruptions
  • ! Current ratio of 1.07x suggests tight working capital management that could become problematic if operational conditions deteriorate or growth investments accelerate
ChatGPT
  • ! Latest period revenue and net income were flat, which may indicate slower near-term growth momentum
  • ! Thin retail margins leave limited room for cost inflation, wage pressure, or merchandising disruption
  • ! Quick ratio of 0.59x means liquidity depends heavily on steady inventory turnover and operating execution

Key Metrics to Watch

Claude
  • * Same-store sales and comparable sales growth trends - critical indicator of organic momentum and competitive positioning
  • * Gross margin trajectory - any further compression would signal either member pricing pressure or sourcing cost challenges
  • * Membership renewal rates and paid membership revenue - core driver of customer stickiness and predictable revenue stream
ChatGPT
  • * Revenue and comparable-sales growth
  • * Operating margin and free cash flow trend

Costco Wholesale Corp. /New (COST) Financial Metrics & Key Ratios

Revenue
$207.4B
Net Income
$6.2B
EPS (Diluted)
$14.01
Free Cash Flow
$6.9B
Total Assets
$86.4B
Cash Position
$18.9B

💡 AI Analyst Insight

The relatively thin 3.3% FCF margin may limit capital allocation flexibility.

COST Profit Margin, ROE & Profitability Analysis

Gross Margin 7.9%
Operating Margin 3.8%
Net Margin 3.0%
ROE 18.6%
ROA 7.2%
FCF Margin 3.3%

COST vs Consumer Sector: How Costco Wholesale Corp. /New Compares

How Costco Wholesale Corp. /New compares to Consumer sector averages

Net Margin
COST 3.0%
vs
Sector Avg 8.0%
COST Sector
ROE
COST 18.6%
vs
Sector Avg 18.0%
COST Sector
Current Ratio
COST 1.1x
vs
Sector Avg 1.5x
COST Sector
Debt/Equity
COST 0.2x
vs
Sector Avg 0.8x
COST Sector

Sector benchmarks are approximate industry averages. Actual sector performance may vary.

Is Costco Wholesale Corp. /New Stock Overvalued? COST Valuation Analysis 2026

Based on fundamental analysis, Costco Wholesale Corp. /New has mixed fundamental signals relative to the Consumer sector in 2026.

Return on Equity
18.6%
Sector avg: 18%
Net Profit Margin
3.0%
Sector avg: 8%
Revenue Growth
N/A
Year-over-year
Debt/Equity
0.17x
Sector avg: 0.8x

Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.

Costco Wholesale Corp. /New Balance Sheet: COST Debt, Cash & Liquidity

Current Ratio
1.07x
Quick Ratio
0.61x
Debt/Equity
0.17x
Debt/Assets
61.2%
Interest Coverage
78.84x
Long-term Debt
$5.7B

COST Revenue & Earnings Growth: 5-Year Financial Trend

COST 5-year financial data: Year 2021: Revenue $195.9B, Net Income $3.7B, EPS $8.26. Year 2022: Revenue $227.0B, Net Income $4.0B, EPS $9.02. Year 2023: Revenue $242.3B, Net Income $5.0B, EPS $11.27. Year 2024: Revenue $254.5B, Net Income $5.8B, EPS $13.14. Year 2025: Revenue $275.2B, Net Income $6.3B, EPS $14.16.
Revenue
Net Income
EPS (right axis)

5-Year Trend Summary: Costco Wholesale Corp. /New's revenue has grown significantly by 40% over the 5-year period, indicating strong business expansion. The most recent EPS of $14.16 reflects profitable operations.

COST Revenue Growth, EPS Growth & YoY Performance

Revenue Growth
N/A
Year-over-year
Net Income Growth
N/A
Year-over-year
EPS Growth
N/A
Earnings per share
FCF Margin
3.3%
Free cash flow / Revenue

COST Quarterly Earnings & Performance

Quarterly financial performance data for Costco Wholesale Corp. /New including revenue, net income, and earnings per share.
Quarter Revenue Net Income EPS
Q3 2026 $63.2B $1.9B $4.28
Q2 2026 $63.7B $1.8B $4.02
Q1 2026 $62.2B $1.8B $4.04
Q3 2025 $58.5B $1.7B $3.78
Q2 2025 $58.4B $1.7B $3.92
Q1 2025 $57.8B $1.6B $3.58
Q3 2024 $53.6B $1.3B $2.93
Q2 2024 $55.3B $1.5B $3.30

Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.

Costco Wholesale Corp. /New Dividends, Buybacks & Capital Allocation

Operating Cash Flow
$11.1B
Cash generated from operations
Stock Buybacks
$603.0M
Shares repurchased (TTM)
Capital Expenditures
$4.2B
Investment in assets
Dividends Paid
$1.2B
Returned to shareholders

COST SEC Filings: Latest 10-K & 10-Q Analysis

Access official SEC EDGAR filings for Costco Wholesale Corp. /New (CIK: 0000909832)

📋 Recent SEC Filings

Date Form Document Action
Jun 3, 2026 10-Q cost-20260510.htm View →
May 28, 2026 8-K cost-20260528.htm View →
Apr 15, 2026 8-K cost-20260415.htm View →
Apr 1, 2026 4 xslF345X06/form4.xml View →
Mar 13, 2026 4 xslF345X05/form4.xml View →

Frequently Asked Questions about COST

What is the AI rating for COST?

Costco Wholesale Corp. /New (COST) has a Combined AI Grade of A from Claude (B) and ChatGPT (A) with 80% combined confidence, based on fundamental analysis of SEC EDGAR filings.

What are COST's key strengths?

Claude: Fortress balance sheet with minimal leverage (0.17x D/E) and exceptional interest coverage (78.8x), providing substantial financial resilience and strategic flexibility. Strong capital efficiency demonstrated by 18.6% ROE and 7.2% ROA despite ultra-thin margins inherent to warehouse retail model. ChatGPT: Strong balance sheet with $17.38B in cash, low debt/equity of 0.18x, and very high 74.5x interest coverage. Reliable cash generation with $7.68B operating cash flow and $4.87B free cash flow.

What are the risks of investing in COST?

Claude: Revenue growth completely stalled at 0% YoY, indicating potential market saturation, competitive intensity, or macroeconomic headwinds affecting member traffic or spending. Extremely thin profit margins (7.9% gross, 3.8% operating, 3.0% net) provide minimal buffer for unexpected cost inflation, wage pressures, or supply chain disruptions. ChatGPT: Latest period revenue and net income were flat, which may indicate slower near-term growth momentum. Thin retail margins leave limited room for cost inflation, wage pressure, or merchandising disruption.

What is COST's revenue and growth?

Costco Wholesale Corp. /New reported revenue of $207.4B.

Does COST pay dividends?

Costco Wholesale Corp. /New pays dividends, with $1,154.0M distributed to shareholders in the trailing twelve months.

Where can I find COST SEC filings?

Official SEC filings for Costco Wholesale Corp. /New (CIK: 0000909832) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.

What is COST's EPS?

Costco Wholesale Corp. /New has a diluted EPS of $14.01.

How is the AI analysis conducted?

Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.

What is COST's fundamental grade?

Based on our AI fundamental analysis in June 2026, Costco Wholesale Corp. /New has a A grade with 80% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.

Is COST stock overvalued or undervalued?

Valuation metrics for COST: ROE of 18.6% (sector avg: 18%), net margin of 3.0% (sector avg: 8%). Higher ROE suggests strong returns relative to peers.

What is COST's AI grade for 2026?

Our dual AI analysis gives Costco Wholesale Corp. /New a combined A grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.

What is COST's free cash flow?

Costco Wholesale Corp. /New's operating cash flow is $11.1B, with capital expenditures of $4.2B. FCF margin is 3.3%.

How does COST compare to other Consumer stocks?

Vs Consumer sector averages: Net margin 3.0% (avg: 8%), ROE 18.6% (avg: 18%), current ratio 1.07 (avg: 1.5).

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Disclaimer: This analysis is generated by Claude AI (Anthropic) and ChatGPT (OpenAI) based on publicly available SEC EDGAR filings. It does not include stock price data and should not be considered financial advice. All fundamental data is sourced from SEC public domain filings. Always conduct your own research and consult with a qualified financial advisor before making investment decisions.
Data Source: SEC EDGAR | Analysis Date: Jun 4, 2026 | Data as of: 2026-05-10 | Powered by Claude AI